The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being

Levy Economics Institute, Working Papers Series

42 Pages Posted: 9 Jan 2017

See all articles by Thomas Masterson

Thomas Masterson

Bard College - Levy Economics Institute

Ajit Zacharias

Bard College - Levy Economics Institute

Fernando Rios‐Avila

Bard College - The Levy Economics Institute

Edward N. Wolff

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER); Bard College - Levy Economics Institute

Date Written: January 5, 2017

Abstract

The Great Recession had a tremendous impact on low-income Americans, in particular black and Latino Americans. The losses in terms of employment and earnings are matched only by the losses in terms of real wealth. In many ways, however, these losses are merely a continuation of trends that have been unfolding for more than two decades. We examine the changes in overall economic well-being and inequality as well as changes in racial economic inequality over the Great Recession, using the period from 1989 to 2007 for historical context. We find that while racial inequality increased from 1989 to 2010, during the Great Recession racial inequality in terms of the Levy Institute Measure of Economic Well-Being (LIMEW) decreased. We find that changes in base income, taxes, and income from nonhome wealth during the Great Recession produced declines in overall inequality, while only taxes reduced between-group racial inequality.

Keywords: LIMEW, United States, Great Recession, Race, Distribution of Wealth, Distribution of Income

JEL Classification: D31, D63, I31, J15

Suggested Citation

Masterson, Thomas and Zacharias, Ajit and Rios‐Avila, Fernando and Wolff, Edward N., The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being (January 5, 2017). Levy Economics Institute, Working Papers Series, Available at SSRN: https://ssrn.com/abstract=2894528 or http://dx.doi.org/10.2139/ssrn.2894528

Thomas Masterson (Contact Author)

Bard College - Levy Economics Institute ( email )

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Ajit Zacharias

Bard College - Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504
United States
845-758-7734 (Phone)
845-758-1149 (Fax)

HOME PAGE: http://www.levy.org

Fernando Rios‐Avila

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

Edward N. Wolff

New York University (NYU) - Department of Economics ( email )

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New York, NY 10011
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National Bureau of Economic Research (NBER)

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Bard College - Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504
United States

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